On average, the governments of EU countries spent about 51% of GDP and had revenues of 45% of GDP in 2010. Individual countries deviated from the average quite significantly.

Some countries (particularly in Scandinavia) had high expenditures (close to 55%) but they were also prepared to pay high taxes. There is not one country which limited expenditures to 35% or less, but there are countries (mostly in the South) whose revenue base is low (about 35%).

The real problem are countries which have a low revenue but a high expenditure base. Greece is high – but not at the top – as regards expenditures. Greece is low – and close to the bottom – as regards revenues.

Greece’s government expenditures were 50% of GDP, slightly below the EU average. That may come as a surprise to all those who critize Greece for uncontrolled government spending.

With 39% of GDP, Greece’s revenue base was far too low in comparison with her expenditure base. The deficit was, consequently, 11%.

If Greece had had the average EU revenue base of 45%, the budget deficit would have been only 5%. Here one has to consider that Greece’s interest expense (included in government expenditures) is enormous!

If Greece had had Austria’s revenue base of 48% of GDP, her budget deficit – despite enormous interest costs – would have been down to 2%.

Now here is the million-dollar-question: why should foreign tax payers come up with the money to cover Greek government expenditures which money Greek tax payers are not prepared to come up with?